WELLINGTON NEWS

Hokitika Guardian, 5 February 1927, Page 1

WELLINGTON NEWS

WOOL MARKET

(Special to “ Guardian.”)

WELLINGTON, February 2

The first of the series of London wool sales closed on Wednesday, and general satisfaction will he felt with the tone of the market. It would scarcely he correct to say that the London sales exorcise a commanding influence. It is rather the other way about, and it is the sales in Australia and New Zealand that govern prices, the latter dominating the crossbred wool situation and Australia the incline wool situation. "Wool sold in London on a parity of prices ruling here, and a firm market in London must necessarily strengthen the primary markets. The January wool sales in New Zealand have seen prices well maintained with an undertone of, firmness which requires a small favourable circumstance to push up values. And the market displays this strength notwithstanding a comparatively dear money market. The Bank of England discount, rate which practically governs the European money market has been maintained at 5 per cent ever since the first week of December, 1925. Dear money has ruled for a long time and there is little hope even now of the rate being reduced before April, when all the circumstances are taken into account the firmness of the wool market is surprising. It does show that there is a strong world demand for the staple, which would expand as soon as favourable conditions present themselves, and crossbred wool will participate to the full in any upward movement. Crossbred wool notwithstanding the slight advance that has recently been noted, is still very cheap, and attractive because cheap. Tho “ Textile Argus.” a weekly trade journal published in Bradford, in a recent issue remarked: “ There is no part of the world more closely interested in the New Zealand clip Than Bradford, and it is to the advantage of the trade that supplies should he obtained on a reasonable basis. We have heard of wool being sold in Bradford within a fraction of the corresponding price for the same quality in 1914. It looks as though the difference between present and 1911 juices of medium and low crossbred to|is is merely the difference iu the cost of combing. Can there ho any doubt about values being" perfectly sound on such a reasonable basis. In view of the leeway that has to he made up financially in the industrial area, It is tolerably certain that the demand in the new year will he mainly for the lower priced goods which call for tho cheaper crossbreds.” This is the result of the prolonged coal strike, which lias impoverished the working classes and greatly curtailed their purchasing power. While prices are likely to remain steady it is certain that any sharp advance would he Immediately reflected in a contraction in the demand to he followed by a recession in prices.

It is apparent from an examination of the latest available statistics that Britain consumes four times as much crossbred wool as she does merino. The latest figures are for 1925, and these show that the imports of merino wool for that year amounted to 209 million lbs and ot this quantity 12* million pounds was re-exported, leaving for home consumption about 82 million pounds, or the equivalent of 250.000 hales. There is practically no merino wool produced in the United Kingdom. The import of crossbred wool was about 450 million jiounds, and the re-exports were approximately 1200.000,000 pounds, leaving for domestic consumption about 250,000,000 pound and in addition there is about 5(>.000.000 pound of British wool, making a total of nearly .‘IOO million pound, or nearly four times as much ns the merino wool retained for home consumption. It will thus ho seen, that crossbred wool plays an important part in the wool textile economy of the world. While prices remain established at about the present level the demand will he continuous, for Europe is in great need of cheap woollen clothing.